Which statement defines a contract of adhesion?

• A. A contract where terms are negotiated between two parties
• B. The insured must accept the contract as written
• C. The consideration is paid by the insured
• D. The policy may be voided if conditions are not met

Answer: (B)

A contract of adhesion is one that is drafted by the insurer and offered to the insured on a take-it-or-leave-it basis, with little or no opportunity for the insured to negotiate terms. The defining feature is that the insured must accept the contract as written. This is why the statement that the insured must accept the contract as written is the correct choice.

The other ideas describe different concepts: a contract where terms are negotiated between two parties is a negotiated contract, not an adhesion; the fact that the insured pays the premium is just consideration, not theadhesion characteristic; and a policy that may be voided if conditions aren’t met reflects standard conditions and contingencies rather than the adhesion concept.